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Regional Insights
Keeping you up to date with insights from near and far.
2024 Outlook: South
Bringing real southern comforts to the year ahead?
See the big picture
While there are still uncertainties ahead because of the political landscape and other headwinds, SMEs in the region are remarkably robust and I expect to see increased appetite for growth in 2024.
Head of Mid-Corporate South, Barclays Corporate Banking
Tapping into tech and green energy
My team and I see plenty of opportunities for SMEs to grow across our region this year, particularly those operating in the technology and renewable energy sectors. South Wales, for example, which is already a thriving manufacturing hub, is now home to one of the largest collections of tech businesses outside London. This part of the world is also well-positioned to make the most of its coastline for sustainable energy generation and plans for a new Swansea tidal lagoon project, called Blue Eden, have been announced. The multi-billion-pound scheme is expected to be fully funded by the private sector.
Bristol and England’s south west should experience similar expansion in technology, particularly the sustainable sub-sector, in 2024, while I also expect Bristol’s well-established video games sector and significant aerospace companies to continue to flourish. Scores of new businesses linked to life sciences have been established in and around Oxford in the last 10 years, driven by world-class university research. News like pharmaceutical company Moderna’s decision to build a research, development and manufacturing base at the Harwell Campus near Didcot1 is just another chapter in that success story.
Benefitting from the regional infrastructure boost
Southampton Airport’s new £17m runway extension could really begin to give the region’s economy wings in 2024 and the number of other infrastructure projects and initiatives planned for the region is a good reason to be positive about the future. Bristol, Bath and Weston-super-Mare should all benefit from being within Enterprise Zones but the really big opportunity in the South West is Tata’s proposed £4 billion gigafactory in Somerset, which could create thousands of new jobs.
In South Wales, space research, manufacturing and testing facilities will get an £8m boost, thanks to the Space Clusters Infrastructure Fund from the UK Space Agency, while the Celtic freeport will be launched in the spring and summer of 2024 – an initiative that's aiming to create 16,000 new jobs. The Chancellor’s Autumn Statement last November also announced a new Investment Zone centred on Cardiff and Newport to boost economic growth, while the Welsh government’s ambition to be 100% self-sufficient in electricity generation by 20352 promises more infrastructure opportunities.
There are some exciting infrastructures projects in the pipeline for the region and that will bring in valuable investment and create thousands of new jobs.
Head of Mid-Corporate South, Barclays Corporate Banking
Watching the headwinds
Some of the challenges facing our clients in 2024 remain consistent with the year just gone, including ongoing inflationary pressures, still relatively high interest rates and skilled labour shortages, but an additional cost that many businesses will need to accommodate is the national living wage increase in April – particularly in the healthcare, hospitality and leisure sectors, which are significant industries in this region.
Of course, a general election in 2024 means uncertainty around policy direction. For example, our region is home to a number of independent schools, which look set to lose their VAT exemption if Labour wins at the polls. More broadly, all businesses will need to find a way to fund their ESG strategies, while the ever-changing technology challenge now includes the necessity of understanding the benefits and risks of artificial intelligence (AI).
Key takeaways
See the benefits of ESG
An effective ESG strategy can bring significant commercial advantage for SMEs, as well as being the right thing to do. Larger corporates have their own ESG targets to meet and will want their supply chain to help, so ESG is an important factor in many tender processes.
Get AI savvy
The growing popularity of apps like ChatGPT has spotlighted the inexorable rise in use of AI and businesses should make themselves aware of the opportunities and challenges it represents for them.
Stay alert to regional initiatives
Be aware of initiatives and trends in your region – such as infrastructure projects, tax-free freeport zones or growth industries – so that you’re positioned to make the most of the benefits.
Keeping fraud front of mind
Fraudsters are as active as ever, impersonating our colleagues and attempting to defraud our clients. To help protect you and your business we have a wealth of resources available. You can view our quarterly fraud webinars and take a look at our other educational resources on our Fraud Protection Hub.
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